Investment in Green Hydrogen to Exceed USD 1 Billion by 2023: IHS Markit

Investment in Green Hydrogen to Exceed USD 1 Billion by 2023: IHS Markit

According to the Information Handling Service Markit (IHS), London, the Annual global investments in Green Hydrogen (hydrogen production powered by renewable sources) are now expected to exceed USD 1billion by 2023. IHS released news on 3rd December 2020 stating that the increased investment is possibly connected to the falling costs and policy support from governments, shifting towards low carbon emissions.

Green Hydrogen

The future of ‘Green Hydrogen’ is getting bright. According to the IHS Markit, the current operating capacity of splitting water into hydrogen and oxygen through electrolysis technology is 82 MW with a pipeline of over 23 GW. This pipeline includes all the announced projects, planned and under construction. The Electrolysis production is speeding up as multiple giga-factories are under development. And this speed is the outcome of lower production costs and supportive policies.

Constructively, the Green hydrogen production costs fell by 40 percent since 2015 and are expected to fall by a further 40 percent through 2025.

Since 2015 these reductions in the costs of renewable power account for two-thirds of the reductions in Green Hydrogen production and another one-third due to the reduction in the cost of electrolysis.

By 2030, the cost of green hydrogen is expected to see a reduction up to USD 2/kg where it would compete with hydrogen produced from natural gas with carbon capture.

Production of low or zero-carbon hydrogen is the aim of many governments, included in post Pandemic recovery plans and climate strategies. Governments are planning and bringing policies that support Green Hydrogen production. Europe in particular has made it a cornerstone of its green recovery plan.

Soufien Taamallah, Director, Energy Technologies and Hydrogen, IHS Marki,t said, “By 2030, IHS Markit expects that green hydrogen costs could drop below USD 2/kg. This cost is the Holy Grail for electrolysis as this is where green hydrogen starts becoming competitive with traditional hydrogen.” In fact, at these prices, it becomes a viable fuel in mass-market applications, including transportation.

Interestingly, the rise of Green Hydrogen production by current electrolysis pipelines will build a new sector of power demand. The study by IHS Markit shows that by the early 2040s, the production of Green Hydrogen could be the single largest use of electricity surpassing industrial electricity use.

“Hydrogen production has the potential to become a whole new sector of electricity demand. Large scale development of renewable generation will be required to support it, particularly in regions with high-quality renewable resources,” said, Frederick Ritter, Senior Research Analyst, Global Gas, IHS Markit.

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Bhoomika Singh

Bhoomika is a science graduate, with a strong interest in seeing how technology can impact the environment. She loves covering the intersection of technology, environment, and the positive impact it can have on the world accordingly.